Is a Termite Inspection Required for a Conventional Loan? 2026 Rules

The short answer: Fannie Mae and Freddie Mac do not require termite inspections for conventional loans nationwide. However, lenders may require a Wood Destroying Insect Inspection Report (using NPMA-33 form) if:

• - The appraiser notes visible termite damage or active infestation

- The property is located in a high-risk termite region

- The home has a documented history of pest issues

This guide explains exactly when inspections are required, what the NPMA-33 report includes, how termite damage affects your conventional loan approval, and how to negotiate repairs before closing.

For a complete overview of conventional loan programs, see our main guide. For FHA and VA comparisons, skip to the loan comparison section.

Why Termite Inspections Matter in Real Estate

Termites cause over $5 billion in property damage annually in the United States, according to the National Pest Management Association (NPMA). These pests work silently, eating wood from the inside out, often without showing obvious signs for years.

A Wood Destroying Insect Inspection (WDII), typically documented on form NPMA-33, identifies:

• Active infestations - live termites and visible colony activity
• Previous damage - structural weakening from past infestations
• Conducive conditions - wood-to-soil contact, moisture issues, and poor ventilation that attract termites

Professional inspectors check attics, crawl spaces, basements, foundations, and exterior woodwork. The NPMA-33 form is the industry-standard report that lenders, buyers, and sellers all recognize.

The Financial Risks of Skipping a Termite Inspection

Buyers who skip termite inspections face serious financial consequences. According to Fannie Mae and industry data:

• Hidden damage depreciates property value by 10–30% once discovered
• Repair costs average $2,000–$8,000 for moderate damage
• Serious infestations can require treatment costing $15,000 or more
• Structural repairs can triple initial treatment expenses
• Future resale becomes complicated without a clear inspection history

For a $300,000 home, a $300–$500 inspection is a small price to pay for peace of mind and negotiating power.

Do Conventional Loans Require Termite Inspections? The Official Rules

What Fannie Mae and Freddie Mac Say

According to Fannie Mae's Selling Guide and Freddie Mac's Seller/Servicer Guide, conventional loans do not require termite inspections nationwide. However, both agencies state that lenders must require inspections if:

• The appraiser observes visible evidence of termite damage
• The property is in an area known for high termite activity (e.g., southern states, coastal regions, humid climates)
• State or local laws mandate inspections for real estate transactions

When Lenders Will Require a WDII / NPMA-33 Report

Even though Fannie Mae and Freddie Mac don't mandate inspections, individual lenders often require them as a risk-management tool. Lenders will typically condition for a Wood Destroying Insect Inspection Report (NPMA-33) when:

• Visible damage is noted - the appraiser sees mud tubes, frass, or damaged wood
• High-risk location - properties in states like Florida, Texas, California, Louisiana, Hawaii, and the Carolinas
• Prior pest history - the property has been treated for termites before
• USDA or VA loan requirements - if you're comparing conventional to government-backed loans

Loan Program Comparison: Termite Inspection Requirements

Different loan programs have different rules. Here's how conventional compares to FHA, VA, and USDA:

For a detailed comparison of FHA vs. conventional, see our guide: FHA vs Conventional 97 Loans.

What Is an NPMA-33 Wood Destroying Insect Inspection Report?

The NPMA-33 form (developed by the National Pest Management Association) is the industry-standard inspection report. It includes:

• Section 1: Property address and inspector credentials
• Section 2: Inspection areas checked (attics, crawl spaces, basements, exterior)
• Section 3: Evidence found - visible infestations, damage, or conducive conditions
• Section 4: Recommendations - treatment, repairs, or further evaluation
• Section 5: Inspector certification and license number

Lenders require this report because it provides a standardized, verifiable record of property condition. The inspector must be a licensed pest control professional.

What Are "Conducive Conditions" - and Why They Matter

Inspectors don't just look for termites; they look for conducive conditions - environmental factors that attract pests:

• Wood-to-soil contact - siding, deck posts, or framing touching soil
• Excess moisture - poor drainage, leaky pipes, or inadequate ventilation
• Wood debris - firewood, stumps, or construction scrap near the foundation
• Cellulose materials - cardboard, paper, or other termite food sources

Even if no live termites are found, lenders may require corrections to eliminate conducive conditions before closing. This is a common condition on conventional loans in high-risk areas.

What to Do If Termite Damage Is Discovered

Step 1: Get a Complete NPMA-33 Report

Ensure the inspector provides a complete NPMA-33 form with all sections filled out. The report should include photos and specific recommendations.

Step 2: Get Treatment and Repair Estimates

Obtain at least two or three quotes from licensed pest control companies and contractors. Common treatment options include:

• Chemical barriers - liquid soil treatments applied around the foundation
• Bait systems - colony elimination over weeks or months
• Spot treatments - localized treatment for accessible infestations
• Wood replacement - replacing damaged structural members
• Moisture control - ventilation and drainage improvements

Step 3: Negotiate with the Seller

Use the inspection report as leverage. Options include:

• Request repairs before closing - seller hires licensed contractors
• Price reduction - reduce purchase price by estimated repair costs
• Seller credits - seller contributes funds at closing to cover repairs
• Treatment guarantee - seller provides warranty or ensures follow-up

Learn more about seller concessions on conventional loans to reduce your out-of-pocket expenses.

Documents Lenders Require After an Inspection

Provide these documents to your lender promptly to avoid delays:

• NPMA-33 Wood Destroying Insect Inspection Report - signed and dated by a licensed inspector
• Treatment receipts - showing work completed
• Repair invoices - documenting structural work
• Clearance letter - confirming treatment success (if required)
• Warranty documentation - for any treatment or repair work

For a complete list of required paperwork, see our Required Documents for a Conventional Loan guide.

How to Choose the Right Termite Inspector

Not all inspectors are equally qualified. Look for:

• Current state pest control license - verify with your state's licensing board
• Experience with NPMA-33 reporting - specific knowledge of WDII requirements
• Knowledge of local termite species - regional expertise matters
• Positive client reviews - check Google, BBB, and local references
• Sample reports - request a sample NPMA-33 before hiring
• Clear pricing - get a written estimate before the inspection

Many inspectors offer combined services - termite inspection plus general home inspection - which can save money and coordinate schedules.

How Termite Damage Affects Property Value and Resale

Termite damage directly impacts home value:

• Homes with termite history sell for 5–15% less than comparable undamaged properties
• Disclosure requirements mean you must disclose past infestations to future buyers
• Mortgage underwriting becomes more difficult for properties with unresolved damage
• Insurance companies may increase premiums or deny coverage

Prevention costs far less than remediation. A $300–$500 inspection protects a $300,000 investment. Early detection limits damage to localized areas; delayed detection leads to systemic structural issues.

Can You Negotiate Based on Inspection Findings? Yes.

Inspection results give you leverage. Strategies include:

• Request repairs before closing - seller hires licensed contractor, verifies completion
• Price reduction - subtract treatment and repair costs from purchase price
• Seller credits at closing - seller deposits funds in escrow for repairs
• Extended timelines - request more time to obtain multiple repair estimates
• Treatment guarantees - require warranties and follow-up inspections
• Reassess the deal - if damage is extensive, walk away or renegotiate

Present the NPMA-33 report and photos as evidence. Stay reasonable but protect your interests.

Frequently Asked Questions About Termite Inspections & Conventional Loans

Is a termite inspection required for a conventional loan?

No. Fannie Mae and Freddie Mac do not require termite inspections for conventional loans nationwide. However, lenders may require a Wood Destroying Insect Inspection Report (NPMA-33) if the appraiser notes visible damage, the property is in a high-risk area, or the home has a history of pest issues. See our guide on qualifying for a conventional loan for full requirements.

How much does a termite inspection cost?

Termite inspections typically cost $150–$450, depending on location and property size. Some pest control companies offer free inspections if you purchase treatment services. Compare quotes from multiple inspectors.

What happens if termites are found during an inspection?

The inspector provides a detailed NPMA-33 report identifying the extent of damage and infestation. You can negotiate with the seller for repairs, price reductions, or seller credits. Many sellers pay for treatment to preserve the sale. If damage is severe, you may renegotiate or walk away.

Can I get a conventional loan if termite damage is found?

Yes. You can still obtain a conventional loan. The lender will require documentation showing treatment is completed or repairs are planned. Provide the NPMA-33 report, treatment receipts, and repair estimates. Once addressed, loan approval proceeds normally.

How long does termite treatment take?

Treatment varies: chemical barriers take 1–3 days, bait systems work over weeks or months, and structural repairs may take weeks. Your pest control professional provides specific timelines.

Is termite damage covered by homeowners insurance?

No. Standard homeowners insurance policies generally exclude termite damage. Pest prevention and inspections are the homeowner's responsibility.

What is the NPMA-33 form?

The NPMA-33 is the industry-standard Wood Destroying Insect Inspection Report developed by the National Pest Management Association. It's the required form for FHA, VA, USDA, and conventional loan conditions in high-risk areas.

Which states require termite inspections for conventional loans?

Fannie Mae and Freddie Mac don't require them nationwide, but individual lenders may require NPMA-33 reports in high-risk states including: AL, AZ, AR, CA, FL, GA, HI, LA, MS, NV, NC, OK, OR, SC, TN, TX, UT, WA, and others with high termite activity.

Quick Reference: Termite Inspection Requirements for Conventional Loans

Disclaimer: This information is for educational purposes only and does not constitute legal, financial, or professional advice. Loan terms, interest rates, and program availability are subject to change. Please consult a licensed mortgage professional for personalized guidance.